GOLD slipped on long liquidation in New York in response to a stronger tone in equities as some of the flight-to-safety appeal for precious metals waned for now, at least, and investors appeared more willing to take on risk.
April gold futures fell $US8.10 to $US922 an ounce on the Comex division of the New York Mercantile Exchange. May silver lost US32.5 cents to $US12.89.
"The Dow Jones had a move today to the upside," said Willie Gato, broker with BCT Trading. "That's what brought gold lower."
Shortly before gold closed, the Dow industrials were up by around 145 points for the day. They hit an intraday peak of 7382.56 that was their strongest level since February 26.
The improved tone in stocks that began last week means less "anxiety" about the broader markets, and some investors are turning from gold back into equities, said Michael Gross, broker and futures analyst with OptionSellers.com.
Thus, much of the selling in gold is in the form of long liquidation.
KEY COMMODITY PRICES: oil, gold, base metals, livestock and wheat
The gains in equities are likewise dragging down other precious metals such as silver, he said. Stocks may well remain the key driver for gold and silver in the near term, he added.
"Metals are probably going to be reacting to what equities do in the short term," he said.
"And equities are going to be following developments in how the bailout program is working and how the stimulus is working, and in particular the credit markets are responding. It's going to be a day-by-day thing.
"I'm not making any long-term projections on if stocks are going to keep going up and gold is going to keep coming down. But as we stand right now, gold is still in an uptrend. So until that is broken, we'll probably remain cautiously bullish."
Dips in gold to the $US916 area seemed to attract buying and some support has emerged around here, Mr Gato said. Below this, he put support at $US910.20, then $US892.
"But even down in the eights ($US800 region), the market is still bullish," he added. April gold needs to close over $US935.60 technically for a drive toward the $US960 area, he said.
